Season 1, Episode 3

Building a marketplace for a fragmented market with complex workflows with Ruthie Amaru (Freightos)

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About this episode

We talk to Ruthie Amaru, CEO of Freightos, the world's biggest marketplace for freight. We’ll talk about how to serve fragmented markets, with complex workflows and middleman. We talk about how to get supply onboard before having demand, about building for trust and loads of other great things, especially for B2B marketplaces.

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Transcript

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Sjoerd Handgraaf: [00:00:23] Welcome to Two-sided. The marketplace podcast brought to you by Sharetribe. And I am your host, Sjoerd. In this episode, I talked to Ruthie Amaru CEO of Freightos, which is a marketplace for freight. We'll talk about how to serve fragmented markets, which have complex workflows. And that had a lot of middlemen. We talked about how they get supply on board, but for having demand using single player mode. About building for trust and basically lots of other great things. I really, really learned a lot from this episode about B2B marketplaces and I hope you will enjoy. Hi, Ruth. Welcome to the podcast.

Ruth Amaru: [00:01:02] Hey, great to be here. Really exciting to talk to you today.

Sjoerd Handgraaf: [00:01:06] Same here. I love talking about marketplaces. Yeah. So could you give the audience like a short background on who is reus and what did you do at Freigthos essence specifically? How did you end up here?

Ruth Amaru: [00:01:16] Well, you know, I've spent my entire career in startups, Israel as a startup nation, really lots and lots of startups. I've probably been in about nine or 10 different startups over my career. A bunch of them actually were business to business startups. I ran the R and D team at a company that did B2B auctions later acquired by a company called vertical net. Later I ran product and R and D and a company called unicorn later acquired by IBM and was just a, you know, part of many startups in the R and D product led into the business space. Many of them that focused on business systems, which I really like what makes a business work, how businesses do business. Basically. And so I was pretty excited when our founder, as fee Schreiber asked me to come join him. I'd actually done two startups with him already. This was the third startup that he was doing. And he asked me to come join him and build a marketplace. And he said, it's a B to B marketplace. What else could you want? And I was like, well, B to B marketplace. What else could I want? So that's how I got to Freightoss.

Sjoerd Handgraaf: [00:02:22] Yeah. Tell us a little bit about what is Freightoss.

Ruth Amaru: [00:02:25] So, yeah, I wasn't really sure what Freightos was when I joined, because you know, people in the high tech industry don't always understand freight because freight is real right. Freight is actually about large boxes and containers moving from one place on the globe to another place in the globe. And Freightos set out to make freight simple. And obviously for us in the tech world, we can't imagine how actually complicated it is or was before. Companies like Freightoss started digitizing it, but the freight world was a world. And this is where its fee, you know, came up with this ideas. He worked in a company that shipped leading devices around the world and he said, well, you know, okay, I need to book a container to move 20,000 lighting devices from China to the U S and he figured he would go online, find a container book. It. You know, put his credit card through and be done. And he was just basically Florida to discover how complicated it was, including the need of emails and faxes and phone calls. So he set out, he said, okay, we need to digitize free. And he always had in mind from day one, this idea of building an Expedia for free. So the same as you go online and book a passenger travel book, a fleet, um, you'd be able to book passage for your shipment or shipments. It's that simple in terms of the idea, but then actually the, you know, making it happen was a lot more complicated.

Sjoerd Handgraaf: [00:03:51] Yeah. I can relate to that. I used to work for a hardware startup. We used to make this home energy management system. And I remember having to deal with getting like a bunch of prototypes from China, too. Finland. And we couldn't do anything because the couple of companies that I've found, like let's say I found five and two of them wanted to first visit the office to make a deal. Sounds like, no, we just need like 500 of them here, like by next month. Why is this such a problem? So, yeah, this is about a marketplace for freight. So what are the marketplace always supply side what's demand side. So how is that for Freightos.

Ruth Amaru: [00:04:24] So the demand side are importers and quarters. Like you sitting in Finland wanting to import some prototypes from China or somebody who's building something and then exporting it. Right. So anybody really who's importing or exporting is on our demand side. Wait, our buyer's side and the sellers are anyone who provides logistics services. So that would be anybody who helps importers and exporters get their goods from one place to another. And, you know, we'll maybe talk about this further on down, but that can be a multi tiered system because the industry is actually a little bit more complicated than. Just single businesses that do the end to end move. When you move freight, it has to go through a lot of different stages. So the supply side is actually a little bit more complex, but it's basically made up of logistics providers or people who move goods around the world.

Sjoerd Handgraaf: [00:05:19] Yeah. Is there a way you can untied it a little bit? Cause I listened to a couple of your presentations and I know that you have a nice visual representation usually because I feel that that is a place where Freightos is. Actually providing the value, right? I mean, it's a classic marketplace, parts, fragmented markets, et cetera. So could you untangle maybe a little bit the supply side, because that is where of course the magic happens.

Ruth Amaru: [00:05:42] Sure. You know, it's funny, it's only recently that I've understood that we're not the only ones taking these complex supply sides and trying to untangle that and make it work. But the way the freight world works is that there are carriers, right? So the carriers. Are the companies that actually own the vehicles that move freight. So if you're doing a move and you need to move a pallet from, let's say China to Finland, you're going to start in Shanghai. A truck is going to back up to the factory there and pick up your pallet of goods. And take it to a warehouse near a port at the warehouse, it's then going to have to start going through export customs. And then eventually once it's completed that it could be loaded on a plane or a ship does what it needs to do to get to the other side of the world. Then it's unloaded import customs. Maybe some warehousing Kristen time and then a delivery truck again. So all of those pieces are managed usually or owned by multiple different businesses. You might own a truck or two trucks, or you might be a customs broker. You might actually be a ship operator or an airline. Right. And there's this additional tier within the freight industry. Uh, businesses called freight forwarders. And these are service providers who tie together the entire end to end business for you and importer. So you don't need to think about all those different pieces.

Sjoerd Handgraaf: [00:07:12] So the freight forwarders are taken basically from the truck that backs into the factory up until my front door.

Ruth Amaru: [00:07:18] So funnily enough, what they do is they just call all these people. They don't do anything. Right. All they do is figure out what it is, you're shipping. So they call your supplier and say, how big is it really? And they get the real size and then they book it on an airplane. Let's say, cause you said you need it right away. And then once they've booked it on the airplane, they arranged for a truck to go pick it up. So they're not ever touching the freight. Generally the freight forwarders. All they're doing. It's like they're project managers almost, or they're, you know, party organizers. Right. So they get all of these different pieces, you know, put together. And in that case, a platform or a marketplace can do two things. You know, the simple thing is just let those. Party planners advertise their parties. Right? So let those party planners figure out how much it's actually going to cost to move freight, post the prices online. And then when a booking's made, go ahead and execute the shipment. But if you think about it, once you create a technology, that's an intermediary, you as the buyer, May say, you know what? I don't want you to handle the trucking to buy warehouse. I'm going to go get my uncle who has a truck to pick it up, or, you know, I'd like a little bit more control. Cause I want to control the price. I want to control the transit time. I want to control, you know, the quality and who I use. And so suddenly because it's a marketplace and it's a technology. We started to see where we could potentially break up the entire end to end service and make it more of a, like a mix and match.

Sjoerd Handgraaf: [00:08:51] So I was going to regularly do this just to clear this up because I'm not an expert on frayed, but are you in competition then with freight forwarders is Freightos like a alternative to the classic freight forwarders.

Ruth Amaru: [00:09:04] Well in the longterm, possibly in the short term, not at all, because there's still so many complications in the world of freight that print forwarders have an important role. And at the moment, most of our sellers are freight forwarders, but we know, and the freight forwarders know that eventually, you know, layers are stripped out. That's what happens in a technology based world is that people create technologies. You know, the travel agents. They disappear eventually, you know, they were very, very useful and there are some people who probably still occasionally call a travel agent for something complicated and it didn't happen overnight. Right. It took 20 plus years to make it so that there was just no role for them. So I think the freight forwarders kind of know that and the smart freight forwarders are looking for ways to add additional value.

Sjoerd Handgraaf: [00:09:55] Okay. That's clear. Yeah. I wasn't sure if the aim was about that, but there are so many still moving parts that you can provide to them basically as well.

Ruth Amaru: [00:10:03] Great.

Sjoerd Handgraaf: [00:10:04] Alright. And so this is a very big idea, very big. Like you already mentioned the complex set of services that you basically offer in one platform, surely that wasn't all there in the first version. Right? So what was the first version?

Ruth Amaru: [00:10:18] Okay. So the first kind of thing I probably need to answer is the chicken and egg question, right? Always the question when you're building a marketplaces, are you, do you start by building up your supply or your demand? And in the case of Freightos, we actually had decided upfront that we were going to build up the supply first, because not only do you need to choose, right? Where do I start supplier demand, but our supply side didn't even know how to automate. Their pricing yet. So if you were to call a freight forwarder and even today, if you called, you know, as you described, they wanted to come to your office, right. You have to call them because they would then spend many days trying to put together a pricing quote for you. So when we founded Freightoss, we actually knew upfront that we needed three years. To build a supply side platform that would allow for automated pricing. So that was step one. I mean, I wasn't even in the company, then the company spent three years building a SAS platform to allow freight forwarders. Two with one push of a button, create their pricing with all those different pieces that I mentioned, the trucking and the customs broker gel, those different pieces.

Sjoerd Handgraaf: [00:11:27] So this is often referred to as this single player mode, right? Where you offer something to a site that can use the marketplace without the other side being present. Right.

Ruth Amaru: [00:11:37] Exactly exactly. They had their own demand side that they were talking to on the phone and they were creating PDFs from the SAS to send out with automated pricing. The value proposition to the supply side was just, Hey, here's a tool that will make your job much, much easier. And then we rolled that out to a thousand service providers, which is quite a lot. I mean, it's more than enough to seed the supply side.

Sjoerd Handgraaf: [00:12:05] Yeah. Do you remember what you remember? It's not the right word. You weren't dare at a time, but what's the pricing. That was something that come up after some customer research field and talk to many, or did he have some experience or supposedly did. He mentioned the experience in this world, right? So they decided that pricing is the pain point.

Ruth Amaru: [00:12:22] He decided that the pricing was a big enough pain point, but it was a good kind of way to get started working with these forwarders. And it was actually a necessary step in order to be able to create that Expedia. Right. So if you go ahead and you say I'm going to create a marketplace for dog-walking right. Dog walkers may not know how to price their services. So that's going to be the first thing you need to do.

Sjoerd Handgraaf: [00:12:45] Yeah, no, that makes total sense. And especially after what you just described, like all the different moving parts that make up a price in that service or in that particular industry, let's go. Great. So first supply got onboarded through a value proposition in form of a SaaS business. And then how did you move the first demand board? And initially.

Ruth Amaru: [00:13:02] So, you know, as you can imagine, we, even, before I joined, we experimented a little bit with, you know, what is it going to take? How mature does the supply side need to be before we can bring on demand, a couple of experiments that didn't work. But then when I came on board, actually the idea was to take the entire supply side we already had using our SAS flip a switch. Turn them on and voila there, we would have marketplace, of course, that doesn't work. It doesn't work like that, but we did it. We did do it. We, first of all, obviously the people who had bought SAS from us had not signed up necessarily to sell on a marketplace. So this is a very kind of opaque market. Most of them said absolutely not. I mean, it's great that you're giving us assess. We have absolutely no interest in publishing our rates online. So the first thing was actually to find any of the, you know, this is a huge surprise, as you can imagine here, you think you've built up your supply side. Everything's ready to go. And then you discover that your supply side is not at all interested. They're like, no. Right. So that was okay because by building that supply side software, we had all the software in place. We'd already figured out exactly how to do the pricing, which is on its own novel. So then we just went out to the market and rather than saying to these freight forwarders, Hey, would you like to publish your rates online? We changed the pitch to, Hey, can we bring you some more business? And obviously, you know, a bunch of them said, yes, we got a nice group. We got them ready to go. And we published and we were ready to go with worldwide coverage for anybody who wanted to import or export, and that didn't work. Right. You cannot start a marketplace. It's that big because we'd have, you know, small importers we've discovered that there's a very big difference between. An importer, who's bringing in 30 prototypes from China, you know, just to play around in a Walmart. Right? So suddenly you discover, Oh my goodness. So, and then you discover, wow. People who are importing into the United States are totally different to people who are importing into India. And the world is so big and you look at things from the outside and they all seem so simple. The minute you step in. And I think at about that point, I heard a great podcast by the founder of Fiverr who said. No, it was a fiber. I think it was actually again, who said, you know what, when we started get, which is a taxi app, we started in one block, there was like one little square block. Right. And I was like, ah, that right. So we basically narrowed down. We went from the entire world and everybody in the world to very small importers and exporters from China to the U S.

Sjoerd Handgraaf: [00:15:44] So you did both because usually this constraining happens, right. You constrain the marketplace in some way in order to achieve liquidity. We'll surely we'll move into that later. So, and then usually it's either constrained by geological location, like the block that you mentioned or by some category, but now it sounds to me that you kind of did. Both. So you sort of constraint geologically to China and the U S and then also to a particular type of importer. So did I get that right?

Ruth Amaru: [00:16:13] Yeah. We said very small importers who are importing boxes or pallets, and it was a radical narrowing. As a matter of fact, my CEO at the time joked, he said, you know, next, you're going to tell me you're only doing this zip code to that zip code. And I basically said if that's what it takes to start to build liquidity, that's what we'll do. But that's when we started to actually see orders and really build liquidity and start to grow.

Sjoerd Handgraaf: [00:16:41] Yeah. Do you remember like anything about sort of the first transaction? That's usually like a glory moment in company history or the first couple?

Ruth Amaru: [00:16:48] Well, I mean, I'm sure we wouldn't be the first ones who built, you know, the search and then a select and then a big old book button. And our book button was pink at the time. I remember that. And all the book button did. And I was certain, nobody would ever hit that book button, but what the book button did was actually sent an email to me and somebody else, you know, an operations manager, we had optimistically, you know, hired an operations manager. And I was like, no, don't worry. You're not going to get, and then we get this email. Right. And we're like, okay, now what? Right. Somebody actually hit book. Yeah. So we're like, okay, well, you know, I said to the operations manager, you call the buyer, I'll call the seller and let's see if this is actually a real transaction. If we could make this happen. And he called the buyer and she said, so how do I pay. And he's like, uh, PE, uh, and then she said, Oh, okay, what's the payment fee. And he's like, uh, 3%, you know, the processing fee. So the first few transactions were, you know, obviously took a lot of handholding after about three months. Of transactions. Um, I brought in somebody who was already on our team. I said, okay, you now own supply. Cause we didn't really realize how much you had to own the supply side and really managed the data. And you know, what was coming through the supply side. And he looked at it, he said, listen, I'm going to have to tear it all down and start. A fresh, because right now the things that are coming through, you're going to book them. They're not going to be binding rates and it's just no good. And so I let them do that because that's another thing that we learnt many times the hard way is that if you're not keeping within your scope, if you don't have clean data, if you don't have clean processes, all the noise that you create from nonstandard transactions, it just breaks you. Right. And it's worth dropping it,

Sjoerd Handgraaf: [00:18:47] you know? Do you mean noise towards like product development, physicians, those kinds of things.

Ruth Amaru: [00:18:53] So, I mean that any time somebody books a transaction, if it takes a lot of people to fix it up so that it'll go through and our transactions are large transactions, they're, you know, $1,800 on average. So it's not unreasonable that people might touch. A transaction like that from a unit economics perspective. But what was very clear to us is that marketplaces what marketplaces you're actually, your revenue is the rake, which is only going to be a percentage of that booking. So you have zero money to spend. So you have to have clean data. You can't have it. What I mean by messy or dirty supply is like, if you have somebody who's publishing something, And then after transactions book, they change the price on you or they cancel it or they don't do a great job. You just can't afford that.

Sjoerd Handgraaf: [00:19:44] Understood. Yeah. So basically we're talking about supply quality. Yeah. So supply quality, because that was going to be my next question. Exactly. Like what problem? So once you first play. Concierge concierge marketplace for a while. It sounds like then you hope to optimize, like you said, a couple of these steps in between, because you simply don't have the unit economics to handle everybody all the time. What were the biggest things there? Like what were the first things that you optimize there?

Ruth Amaru: [00:20:11] Well, you know, the first thing we optimize really was the data quality on the supplier side and insisting that it be really strictly standardized. And that was hard. Actually, the SAS we had built well, like any SAS system wants to have enough configuration capabilities for configuring to be good for a lot of people. So, so actually anybody who is using RSS could build their pricing and all these wonderful different ways. But then when you showed them to the buyers, it wasn't apples to apples. So really I think that that was foundational work that we had to do to standardize within the context of a marketplace, what the pricing looked like. And then we had to build really a good review system so that we could allow the buyers. To review their freight services. I think the biggest pieces of work that we did then really the biggest shift. Was when we built our SOP. So, you know, you're creating this world right? When you're building a marketplace, your world is a world in which suddenly parties that didn't have the opportunity to do business directly are doing business directly in the foundation of the world that you build is software, but it's built on. A legal foundation of how these two people are doing business. And your terms and conditions are your standard operating procedures. As the case may be in some industries becomes really your IP, right? So it took me a long time to understand how important it is to define what the buyer is, what seller is, what their responsibilities were, what the marketplaces, what the role of the marketplaces. Right. And to do that in very legal binding terms. So it was really once that started to come together very, very well that we really saw the trust and the two sides and both the supply side and the demand side feeling much more comfortable that this was a framework that was protecting them basically. And, you know, it was a good place to do business.

Sjoerd Handgraaf: [00:22:22] Wow, that sounds amazing. Like I also have come back to these three things that I think I heard this from Mathias ockenfelds from Speedinvest who says that for him, that the pillars of a marketplace has always been trust, transparency and efficiency, and you just take these boxes so nice. And I'm afraid I'm running out of questions here. So let's talk a little bit about the trust because I had a follow up question on the quality, which I didn't do. So if we can quickly go back to there, which is. Kind of like, you know, part of the trust pillar, let's say, because you have to be able to trust the supply side. So how did you maintain and how do you maintain quality on the supply side or on the seller side for that same question?

Ruth Amaru: [00:23:03] Sure. The first thing I'll say is that when we looked at the question of trust, we wanted to have a very clear paradigm, like a, you know, a single sentence that described. In the world of trust, what we were offering, the supply side of what we were offering the demand side and in our case, our guarantee, and it's actually a legal guarantee to the supply side, right. To the freight forwarders. And the logistics providers is we guarantee that you will be paid. That's

Sjoerd Handgraaf: [00:23:32] simple,

Ruth Amaru: [00:23:33] powerful. Yeah. They're working with people they've never met. And that was a big leap to take because in order to do that, we had no idea if we'd be paid. But we just said, look, this is how we get them. This is how we, that was the question. They were asking us all the time, right? Who are these people? Who are these buyers? How do I know they'll pay us? And we said, you don't worry. We guarantee you'll be paid. And then the, the kind of the parallel or the, when do we offer the buyers and the demand side, as we said, The price won't change. And in many marketplaces, that's obviously trivial, but in the freight industry, it actually, the press changes all the time. And it's one of the fears and it's one of the pain points. And one of the frustrations of many buyers is that they get a quote. And then it changes and changes and more and more fees get added because the way freight forwarders work is they're, pass-throughs there. As we said, they're the party planners who's ever made a party, you know, with a party planner and actually stuck to the budget, right? Oh yeah. Well, they didn't have that flower. So we bought these flowers instead, and that cost another a hundred dollars. And we ran out last minute to buy ice and that customer right. And freight forwarders work like that as well. They're like, Well, you know, couldn't get on that flight. We promised you, so it was a different flight and that flight was more expensive or, Oh, Hey, the trucker had to wait three hours at the factory. And so that's another a hundred dollars. This was very, very frustrating to the demand side. So being able to give those two very, very clear promises or guarantees was fundamental, kind of in terms of creating that trust. And that's the foundation.

Sjoerd Handgraaf: [00:25:12] Yeah. How did that work out in practice? Because like on both sides, you're dealing with real reasons why people might not get paid and also real reasons why it might get more expensive. I mean, of course there are some people maybe who act in bad faith and make up a price. For example, I can see a dad, but it also sounds like that in many cases, indeed, like if a shipment can make a particular ship or. Plan and you need to book another one. It just adds to the price. So once you give the guarantee, how did that work out? Did you end up paying a lot? Did you end up losing a lot of money to how often did that guarantee get called in?

Ruth Amaru: [00:25:47] So, first of all, we did put a budget line towards. Making good on that guarantee, even though sometimes it costs us money. And actually that was very helpful to have that budget, have that little pool of money to be able to do that. But it was kind of like a guiding light because for everything we did, we said, okay, now how do we make good on this promise? So what was became clear very quickly is that sometimes the buyers. Make mistakes. They book a shipment, they say it's 13 boxes, but it's 16 boxes. So it's really not fair for them to pay for 13 bucks. That's right. So we quickly had to build some logic around what happens if dimensions change or if the goods aren't ready when you say they are. Right. So really what are the things. That become the responsibility of the buyer. And if the buyer communicated them incorrectly, then there's going to be a change. Right. So to be, and to educate the buyers of fronts. So they understand that. And then the second thing is to find the rate suppliers. The right partners on the supply side, who understand that you win some, you lose some, so sometimes I'll pay a little bit more. Sometimes I'll pay a little bit less, but I'm benefiting a lot to preset my pricing right. In the story, you know, by CEO likes to say, you know, can you imagine if you went into a pizza place and they said, okay, So the crust is gonna run you $10 and the sauce will be another dollar. And if you want mushrooms, that's, you know, and it's not the way it works. You know, most people have learned how to create pricing. And so we worked with our freight forwarders to do that, to say, here's how you buffer yourself a little bit so that you're winning more than you're losing and then just stick with it. And then we had to build a whole layer of KPIs on the supply side to reflect. To the supply side, how they're doing. So each of the sellers can now see how they're doing, or they can see how to be more competitive, but they can also see, you know, what are their reviews? How many times have they kind of transgressed on the SOP or the terms and conditions. So, and we kind of hold them to that to an extent.

Sjoerd Handgraaf: [00:27:57] And if people don't hold them, do you kick them off?

Ruth Amaru: [00:28:00] Yeah, we absolutely do. You know, our supply side is kind of a high quality. There's a lot of investment in the supply side, so we don't just like Willy nilly, you know? Oh, hello, goodbye. We work with these people. We bring the mind. So we try very much, but if we have somebody who's just not playing by the rules, then we kick them off.

Sjoerd Handgraaf: [00:28:20] Yeah, it sounds like maybe even like trust is almost the most important thing in your marketplace. I mean like efficiency, I'm guessing that also like stand alone, freight forwarders, etc. They're sort of catching onto that. And I can imagine, and like transparency maybe as well, but this trust issue sounds like it could be sort of your number one moat.

Ruth Amaru: [00:28:40] Uh, no, I'd say they're all there. They're all there. I mean, I, trust is a big one on any marketplace. Right. You're getting people to do business together. Who've never seen each other. So that's, you know, just huge, but I think that's, what's so fun, right. About building a marketplace. I mean, it's, you're building this massive system and you have so many, it's like a multiplayer game, you know, it's like, Oh, wow. You know, what do we fix next? What do we optimize? How do we choose what's next?

Sjoerd Handgraaf: [00:29:08] Yeah, exactly. No multiplayer game. I have to say that I haven't heard anyone use that metaphor yet, but that's true. Yeah. And then, uh, talking about moat and talking about trust, of course, trust between the supply side and demand side, but how is the trust between Freightos and the users? And, um, now zooming in on the question of, uh, this intermediation, because you mentioned that average order is 800,000. Yeah.

Ruth Amaru: [00:29:34] Yeah.

Sjoerd Handgraaf: [00:29:35] Yeah. So that leaves some space for disintermediation. I would say, how are you handling that?

Ruth Amaru: [00:29:41] Yeah, that's a tough one. I think at the moment our sellers prefer for us to manage it because they don't want to handle the collection. So they send people back, even if they've gone. So we do have definitely do have buyers. Going off platform to the sellers and in general, the sellers send them back to us because they prefer to manage it on platform, but it's still a challenge for us. It's still something, you know, we look at and we think about a lot, for example, potentially we could, you know, in any B2B setting. So B2B is. Fundamentally different. I mean, B2B as this exploding space, right. B2B marketplaces, and it's a great place to be. But one of the biggest challenges there is the B2B is repeat business, which is very hard to keep on platform because just, you know, fundamentally, if somebody is doing the same thing over and over again, They may develop a relationship and they'd want to just go off and do it on their own. So this is definitely something we spent a lot of time thinking about. Even considering maybe we create a white label version of our platform for our sellers, so that if they do want to, if a buyer does want to work only with one seller, we allow that. So, I mean, you know that we haven't done that yet, but we're constantly thinking about it.

Sjoerd Handgraaf: [00:31:03] Yeah, because often what a sadness that India, like, if there is a chance for repeat purchase, then if the only thing that you're offering us, the platform is the matching part. And then the chances are really big, but it sounds like already what you mentioned with the trust part and the guarantee. Those are, sounds like really good reasons for stay on the platform.

Ruth Amaru: [00:31:21] And we also have a pretty deep management kind of for the same reason. Also the trust we've had to build a full track and trace, so you can actually track your shipments. End to end, which in itself also gives an additional layer of both trust, but also a reason to say on the platform.

Sjoerd Handgraaf: [00:31:39] Yeah. So over the time you've grown, like pretty seriously. Do you have any soundbites takeaways for supply or demand? That's like, okay, this was a huge drove lever for us.

Ruth Amaru: [00:31:51] Yeah. I think really the scoping is always the growth lever. Every single time. Every time we take, you know, different opportunities and we. Race in lots of different directions at the same time. And we, you know, open up and we say, wait, let's add, you know, a whole bunch of different product types and let's add some new geographies. And every time we do that, it's actually when we trim back, uh, we identify from all the different things we've played with, which ones are working and we trim everything else off. That's when we suddenly see our growth spurts, you know, it's almost like a tree, literally. We're a plants. Yeah.

Sjoerd Handgraaf: [00:32:31] Yeah. So focus, focus, focus, because this one, thanks called Sarah tell from bench point, I think she has this metaphor of like a white hot center. Like that's you should just get white hot centers everywhere and that's what you should focus on and nothing else. Yeah. It's easiest to three to say on this side, obviously, and being on the outside. Yeah. You just need to focus, but we also see that at Sharetribe hallways, like people with the very first version and they're ready to take on the world and become the global marketplace for everything. And it is very challenging to keep the right scope, keep the right focus.

Ruth Amaru: [00:33:03] Yeah. Yeah. I think the other areas that have been, you know, a big leverage for us, which is relevant probably to a lot of marketplaces is that it's partnerships. You know, we have a partnership now with Alibaba where I'm actually, we're providing the freight for the Alibaba B2B marketplace. So finding those. Yeah. So, and we've been, you know, we have a number of other important partnerships and as a digital, you know, whatever you're doing in your marketplace, you're part of somebody's whole supply chain. You're not everything, you're a piece. And finding the other players who are taking on other pieces and then connecting, right. It's just software. So let's figure out how to connect it. Right. So that's, that's also been a big, uh, a big amplifier.

Sjoerd Handgraaf: [00:33:50] Yeah. And was there anything you would've done differently that you're like, Oh, well we tried this, that we're going to do that again.

Ruth Amaru: [00:33:58] I think the biggest things I regret are when we decided beforehand what was going to work and then decided to invest a huge amount upfront. Right. And we made a decision to move to much larger importers. And it was just hard to test the waters. So, you know, there's some things that are easy to test the waters, some things that are hard, that was a hard thing to test the waters. We invested a lot and it didn't pan out, you know?

Sjoerd Handgraaf: [00:34:24] So you mean like big names even I would know.

Ruth Amaru: [00:34:26] Yeah. So I think that the, one of the things that is also a fundamental of building marketplace is that model right. Is having, you know, we didn't talk at all about data, but we could do a different one. Sometimes we talk about data, but understanding you're under. Lying core model and not trying to hundred exit ever. What you're doing is you're trying to tweak it and tweak it and improve it and take little bits of investment and see what works. I mean, you're building a new world. You can be pretty certain that, you know, you really want to a whole mall. Complex over there, but don't just, you know, put a stand there and see if people buy and, you know, just like build slowly incrementally. I think that's one of the keys. Yeah.

Sjoerd Handgraaf: [00:35:10] Well, the last question about the big guys, because I feel that, and this is more of a gut feeling. I don't have any scientific evidence for that, but I often have the feeling that. When working, especially in B2B is a serious high end B2B, is that a lot of the known guys, they realize so much of their business on brand and trust that was previously just not available. I feel that they're kind of in a marketplace that advantage is sort of taken away. So I'm not actually that surprised. And it's easy of course, to say later from the outside, that doesn't work too well for them. How do you feel about that statement?

Ruth Amaru: [00:35:45] You know, actually, if you look at almost anything that's been commoditized eventually. Yeah. Anything that can be commoditized will be commoditized and it's true. And that's, you know, part of the difficulty is definitely that they needed a person, they needed an account manager and just got very, very expensive to manage. But it's just a question of time, because if you look now even large companies are booking, travel, work, travel business, travel online after many, many years of saying, no, we would never do that. We're working with X and we're working with this travel agency and they give us a, they give us invoice, you know, whatever it is we need from them. And then they're realizing, you know what, at some point. You need to move to the next stage. And, you know, as startups, we always have to figure out, are we at that next stage yet, or is a little premature. So, you know, we push the envelope and eventually, eventually somebody is going to get in there.

Sjoerd Handgraaf: [00:36:40] Yeah. Alright. Last question. So what's next for Freightos? So which geos are you handling now? Are you already global? If not, then what are the next opportunities for you in terms of new markets for new revenue models?

Ruth Amaru: [00:36:53] Oh, gosh, so many we're currently focused mostly on buyers in the U S UK and Canada. We're expanding to Europe, Australia, and possibly even the middle East. So we're expanding now through partnerships with B2B marketplaces to really go global. It may take five years, but that's what we're doing. We're also expanding the products that we have available. So not just shipping, but also warehousing. And connections to other services that importers might need, like trade finance and quality assurance. We're also expanding and deepening our connections and going actually to work directly with airline carriers and with ocean carriers and with express carrier. So moving all the way. And so, but again, when I say we're doing all these things, that's our canvas, that's our five-year canvas, but then we take it a piece at a time, right? We take it a small piece at a time into all of these areas and, you know, world trade is $19 trillion. Market. And even the ones, you know, the area that we're in is many hundreds of billions of dollars that we're looking at. So we have a large canvas to paint on and we're just getting started.

Sjoerd Handgraaf: [00:38:02] All right, Bruce, that was really great interview. I learned a lot about freights learned a lot about Freightos. Where can people find Freightoss?

Ruth Amaru: [00:38:08] So just online freightos.com F R E I G H T O s.com. Check it out. It's free to sign up and trade up.

Sjoerd Handgraaf: [00:38:17] All right. Thanks for being here. And we'll be in touch.

Ruth Amaru: [00:38:19] Okay, thank you for having me and happy to talk about marketplaces anytime.

Sjoerd Handgraaf: [00:38:24] Alright. Bye bye.

Ruth Amaru: [00:38:27] Thank you for listening to two-sided the marketplace podcast. If you enjoyed today's show, don't forget to subscribe. If you listen on iTunes, we'd also love for you to rate and give us a review. If you got inspired to build your own marketplace, go visit

Sjoerd Handgraaf: [00:38:41] www

Ruth Amaru: [00:38:42] dot dot com. It's the fastest way to build a successful online marketplace business. Until next time.

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